For the purpose of furthering discussion,
S. Lerner,
C. M. A. Clark, and W. R. Needham have developed a rudimentary
Universal Basic Income (UBI) system for Canada in their book
Basic Income: Economic Security for All Canadians.
It is designed to replace the majority of Canada's social welfare
and income assistance programs. This UBI model is not an actual
proposal, but a hypothetical proposal that allows the issues
raised by such a proposal to be discussed. Much greater
resources than those available for this proposal would be
required to develop a complete Canadian UBI proposal. (Please
note that this model leaves provincial taxes and the GST
unaffected.)

The 41.41 percent flat income tax is a conservative
estimate. Because estimates of national income
frequently miss capital gains income that would be taxable
under a UBI system this flat tax would probably be
significantly lower. Moreover, were a UBI system to be
developed either by a government agency or a well-endowed
research institute, methods of taxation other than a flat tax
could easily be devised, and, once again, the tax rate could be
dramatically reduced.

General Comments

A UBI is not some kind of far-fetched utopian dream. Ireland,
which has recently led the world in economic growth, is currently
studying the feasibility of a UBI. Although North Americans are
still heavily influenced by the puritan idea that God rewards
hard-working people with material prosperity, the full impact of
the historic change in the nature of work has yet to be felt.
Very often, in human affairs, the sensible course of action is
only chosen after all other alternatives have been exhausted. So
it may be here. But ideas have a life of their own, and it is
useful to have the outline of another possibility. The
table on
the following page shows how most Canadians would be
affected by the implementation of the very simple flat-income-tax
UBI model that is described above. (Note that the figures in the
After Tax Income With UBI column are computed by
multiplying the figures in the Earned Taxable Income
column by 58.59% (100% – 41.41%) and then adding the figures in
the Untaxed UBI column).